Dissolved company meaning: what is a dissolved company?
In short, dissolving a company refers to when a company is removed or ‘struck off’ from the Companies House register. Once this has happened, the company no longer exists and it then becomes illegal for it to continue to trade.
Our insolvency advisors recognise that this could be an overwhelming, stressful and confusing time for you, which is why we are here to help you create an action plan shaped around your individual circumstances.
Here, we take a closer look at what dissolving your company would mean and the laws surrounding this process.
Is dissolving a company the same as liquidation?
No, liquidation and dissolving a company are two different processes. You dissolve a company if no debt is present or if creditors of the company agree to write-off any debt. Liquidation, on the other hand, can be when a company is insolvent – meaning its unable to pay off the debts it owes. If you’re not sure which is right for you, then get in touch with the professional team at Insolvency.co.uk and we can discuss your options.
Can I dissolve my company?
As mentioned, your company must be solvent if you want it to be dissolved. Additionally, your company must:
- Not have traded or sold any stock in the previous three months
- Not have changed their name in the last three months.
- Not be threatened with any type of insolvency proceedings, including liquidation.
- Not have any agreements with creditors, for example, a Company Voluntary Arrangement (CVA) – a legally-binding payment plan between the company and any creditors that are owed money.
These restrictions have tightened up to stop insolvent companies from avoiding debt by simply applying to be struck off.
If you can’t comply with the above conditions, then you won’t be able to dissolve your company. If this is the case, then contact Insolvency.co.uk and we can discuss alternative options.
What is the dissolution process?
If your company meets the above requirements and you have decided to dissolve your company then this is done through a DS01 form, which is posted to Companies House (this can also be done online). This form must be signed by the majority of the directors at the company and then these forms need to be sent to creditors, employees, shareholders and other directors within seven days of making the application.
Anyone owed money by the company must also be notified in case they object to the strike-off process.
A notice should also be placed in The Gazette announcing the decision. And, if nobody objects to your notice, then your company will officially be dissolved in three months. At this point, The Gazette will then run confirmation of the dissolution.
Can anybody block my company from being dissolved?
Shareholders or any other interested party including HMRC, creditors and employees could have a reason to stop the dissolution application. These could include:
- All the necessary parties have not been told about the company’s decision to dissolve.
- The company is insolvent and creditors are owed money.
- If it is suspected that the directors have broken the law, for example, committed fraud.
- An employee wishing to take legal action against the company.
- If the company is involved in legal action with creditors to wind up the company.
- If part of the closure process has not been followed correctly.
Are you thinking about dissolving your company? It’s time to seek professional advice
If you feel that dissolving your company is the best option for you, then get in touch with the friendly team at Insolvency.co.uk. Our professional Insolvency Practitioners can support and advise you so that you feel confident that you’re making the right decision for you and your company.